304.15-400 Prohibited policy plans.
(1)
No life insurer shall hereafter deliver or issue for delivery in this state:
(a) As part of or in combination with any life insurance, endowment or annuity
contract, any agreement or plan, additional to the rights, dividends, and
benefits arising out of any such contract, which provides for the accumulation
of profits over a period of years and for payment of all or any part of such
accumulated profits only to members or policyholders of a designated group
or class who continue as members or policyholders until the end of a specified
or ascertainable period of years.
(b) Any "registered" policy; that is, any policy purporting to be "registered" or
otherwise specially recorded, with any agency of the state of Kentucky or of
any other state, or with any bank, trust company, escrow company, or other
institution other than the insurer; or purporting that any reserves, assets or
deposits are held, or will be so held, for the special benefit or protection of the
holder of such policy, by or through any such agency or institution.
(c) Any policy or contract under which any part of the premium or of funds or
values arising from the policy or contract or from investment of reserves, or
from mortality savings, lapses or surrenders, in excess of the normal reserves
or amounts required to pay death, endowment, and nonforfeiture benefits in
respective amounts as specified in or pursuant to the policy or contract, are on
a basis not involving insurance or life contingency features:
1.
To be placed in special funds or segregated accounts or special
designated places or
2.
To be invested in specially designated investments or types thereof, and
the funds or earnings thereon to be divided among the holders of such
policies or contracts, or their beneficiaries or assignees.
This provision does not apply as to any contract authorized under KRS
304.15-390.
(d) Any policy providing benefits or values for surviving or continuing
policyholders contingent upon the lapse or termination of the policies of other
policyholders, whether by death or otherwise.
(e) Any policy containing or referring to one or more of the following provisions
or statements:
1.
Investment returns or profit sharing, other than as a participation in the
divisible surplus of the insurer under a regular participation provision as
provided for in KRS 304.15-100.
2.
Special treatment in the determination of any dividend that may be paid
as to such policy.
3.
Reference to premiums as "deposits."
4.
Relating policyholder interest or returns to those of stockholders.
5.
That the policyholder as a member of a select group will be entitled to
extra benefits or extra dividends not available to policyholders generally.
(2)
This section shall not be deemed to prohibit the provision, payment, allowance or
apportionment of regular annual dividends or "savings" under regular participating
forms of policies or contracts.
Effective: June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 15, sec. 40, effective June 18, 1970.
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